India will decide policy step once impact of Iran-Israel conflict understood

India will take a policy decision to mitigate trade impact from Iran-Israel conflict after understanding the consequences. India, a large oil importer, imports significant amount of crude from the Middle East. Oil prices dropped with market downplaying broader regional conflict risk after Iran’s attack on Israel.

India’s merchandise trade deficit decreased to $15.60 billion annually in March, according to government data. The yearly deficit narrowed to $240.2 billion in FY24. Economists, surveyed by Reuters, had estimated March’s deficit at $18.55 billion.

Exporters anticipate 10-15% rise in air freight to Europe post Iran’s attack. Red Sea crisis diverts cargo to air, inflating costs. Longer routes cause delays and impact engineering exports. Kolkata exporter expects 30-35% reduction in new project exports.

Indian basmati rice and tea exporters are anxious about the impact of Iran’s attack on Israel. Concerns over outward shipment and rising sunflower oil prices persist amidst the conflict, posing challenges for the industry.

The pace of exports has more than doubled from the 6.18% growth in the same period of FY23, according to estimates by Pharmaceutical Export Promotion Council (Pharmexcil).

India imposed a 20% export duty on white rice in September 2022 and subsequently on parboiled rice in August 2023 to control rising domestic prices. There is no ban currently on basmati rice exports but a minimum export price of Rs 1,200/ million tonnes (mt) was prescribed, which was later reduced to Rs 950/ MT.

Indian exporters seek legal advice after attacks by Houthi rebels and Somali pirates. They revise contracts, opting for DAP and FOB terms, amid disruptions in container shipping lines due to Red Sea crisis.

India has simplified the payment mechanism for traders importing pulses from Myanmar, requiring them to use the Rupee/Kyat direct payment system through the Special Rupee Vostro Account (SRVA) through the Punjab National Bank. The Indian Mission informed the ministry that the Rupee/Kyat Settlement Mechanism was operationalised from January 25 to simplify trade transactions and make […]

The department said that the Protocol pertaining to the amendment is yet to be ratified and notified under Section 90 of the Income-tax Act, 1961. Until this Protocol comes into force, any queries or concerns regarding the amendments will be addressed as and when necessary, said the I-T department.

The clarification follows concerns by tax experts over the agreement opening past investments to scrutiny from tax authorities at the time of exit following the protocol, which was inked on March 7. A key concern expressed by experts is about reopening of past cases in view of the amended provision.